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last-Lean Manufacturing.ppt

  1. 1. CH/1 © Dr. Christian Hicks Lean Manufacturing Dr Christian Hicks
  2. 2. CH/2 © Dr. Christian Hicks Newcastle upon Tyne and the North East of England
  3. 3. CH/3 © Dr. Christian Hicks W Mids N Ireland Wales North East Y & H NW S West Scot E Mids UK England London S East East 85 90 95 100 105 110 115 65 70 75 80 85 90 95 100 Participation (Employment rate) Productivity (GVA per Job - Index UK=100) Productivity (GVA per job) vs. Participation (jobs per population of working age) - 2003 Regional policy seeks to increase productivity and participation
  4. 4. CH/4 © Dr. Christian Hicks Sectoral Performance NE 2002 (GB = 100%) GVA Growth GB 1992-2002 Regional LQ NE 2002 Agriculture, hunting, forestry & fishing 91% -6% 59% Mining and quarrying of energy producing materials + Other mining and quarrying 99% -26% 137% Manufacturing 97% 26% 130% Electricity, gas and water supply 87% 39% 142% Construction 83% 58% 112% Wholesale and retail trade (including motor trade) 86% 102% 88% Hotels and restaurants 87% 126% 93% Transport, storage and communication 89% 77% 89% Financial intermediation 88% 107% 53% Real estate, renting and business activities 84% 161% 69% Public administration and defence4 76% 46% 121% Education 101% 124% 132% Health and social work 101% 110% 134% Other services 78% 150% 89% Source: ONS & ABI Lower than average manufacturing sector performance NE sectoral performance, sector growth and regional significance UK manufacturing has relatively low GVA growth NE has high reliance on manufacturing Increasing manufacturing productivity is a regional priority
  5. 5. CH/5 © Dr. Christian Hicks North East Economy Previously a strong reliance on traditional industries: • Coal mining • Ship building • Power plant (steam turbines, switchgear etc.) • Defence (tank factory) All these sectors have been in long term decline.
  6. 6. CH/6 © Dr. Christian Hicks Nissan Motors UK (Sunderland) The Bluebird was the first UK Nissan car, which was produced in July 1986. At the end of 2004, the plant produced 400,00 cars per year.
  7. 7. CH/7 © Dr. Christian Hicks Henry Ford’s production line was developed in 1913. The idea was inspired by a trip to an abattoir.
  8. 8. CH/8 © Dr. Christian Hicks Any colour you like provided it is Black! - Standardised Vertically integrated – even farmed sheep! Model T Ford 1909. 1909 Model T Ford Any colour you like provided it is black!
  9. 9. CH/9 © Dr. Christian Hicks
  10. 10. CH/10 © Dr. Christian Hicks Scientific Management “Whenever a workman proposes an improvement, it should be the policy of the management to make a careful analysis of the new method, and if necessary conduct a series of experiments to determine accurately the relative merit of the new suggestion and of the old standard. And whenever the new method is found to be markedly superior to the old, it should be adopted as the standard for the whole establishment“, F.W.Taylor, Principles of Scientific Management, 1911. Standardisation and best practice deployment
  11. 11. CH/11 © Dr. Christian Hicks Ford Mass Production System • Minimised waste, maximised value • Workers paid $5 per day, more than double the average • Model T cars were cheap for customers, by 1918, half of all American cars were Model Ts. • By 1927, 15,007,034 had been produced, a record which stood for the following 45 years.
  12. 12. CH/12 © Dr. Christian Hicks Toyota Production System • After World War II, Toyota was almost bankrupt. • Post war demand was low and minimising the cost per unit through economies of scale was inappropriate. This led to the development of demand-led pull systems. • The Japanese could not afford the expensive mass production facilities of the type used in the USA so they instead focused on reducing waste and low cost automation. • Likewise, Toyota could not afford to maintain high inventory levels.
  13. 13. CH/13 © Dr. Christian Hicks Taiichi Ohno (1912 †1990) Shigeo Shingo 1909 †1990 Founders of the Toyota Production System (TPS)
  14. 14. CH/14 © Dr. Christian Hicks Just-in-Time Manufacturing “In the broad sense, an approach to achieving excellence in a manufacturing company based upon the continuing elimination of waste (waste being considered as those things which do not add value to the product). In the narrow sense, JIT refers to the movement of material at the necessary time. The implication is that each operation is closely synchronised with subsequent ones to make that possible” APICS Dictionary 1987. JIT became part of Lean Manufacturing after the publication of Womack’s Machine that Changed the World in 1991
  15. 15. CH/15 © Dr. Christian Hicks Lean Manufacturing is a way of thinking Faurecia, Washingtong, Tyne & Wear
  16. 16. CH/16 © Dr. Christian Hicks Waller, D.L.,,1999,”Operations Management: A Supply Chain Approach”, (Thompson, London) Lean Manufacturing goals
  17. 17. CH/17 © Dr. Christian Hicks Lean Manufacturing • Arose in Toyota Japan as the Toyota Production System • Replacing complexity with simplicity • A philosophy, a way of thinking • A process of continuous improvement • Emphasis on minimising inventory • Focuses on eliminating waste, that is anything that adds cost without adding value • Often a pragmatic choice of techniques is used
  18. 18. CH/18 © Dr. Christian Hicks Toyota Production System • Technologies and practices can be copied. • Most of the philosophies and techniques are widely disseminated. • However, Toyota remains at the forefront, primarily because it is a learning organisation. • Problem solving methods are applied routinely and are completely ingrained. • The employees are continually engaged in Kaizen (continuous improvement). • Many aspects of TPS are based upon embedded tacit knowledge.
  19. 19. CH/19 © Dr. Christian Hicks TPS: How the work is done • Every activity is completely specified, then applied routinely and repetitively. Because: • All variation from best practice leads to poorer quality, lower productivity and higher costs. • It hinders learning and improvement because variations hide the link between the process and the results. It is necessary to make sure that the person performing the activity can perform it correctly and that the correct results are achieved.
  20. 20. CH/20 © Dr. Christian Hicks 7 Forms of Waste ‘Muda’ • Overproduction – most serious waste because it discourages the smooth flow of material and inhibits productivity and quality. • Waiting – wastes time and money. • Transport • Inappropriate processing – e.g. use of complex processes rather than simple ones. Over complexity encourages over production to try and recover the investment in over complex machines. • Unnecessary inventory – increases lead-times and costs. • Unnecessary motion – relates to poor ergonomics where operators have to stretch, strain etc. This makes them tired. • Defects – physical waste. Regarded as an opportunity to improve. Defects are caused by poor processes.
  21. 21. CH/21 © Dr. Christian Hicks Lean Manufacturing • Philosophy • Techniques – usually applied very pragmatically.
  22. 22. CH/22 © Dr. Christian Hicks Lean Techniques • Manufacturing techniques • Production and material control • Inter-company Lean • Organisation for change
  23. 23. CH/23 © Dr. Christian Hicks Manufacturing Techniques • Gemba Kanri • Cellular manufacturing • Set-up time reduction • Smallest machine concept • Fool proofing (Pokayoke) • Pull scheduling • Line stopping (Jikoda) • I,U,W shaped material flow • Housekeeping
  24. 24. CH/24 © Dr. Christian Hicks • System by which standards for running the day-to-day business are established, maintained controlled and improved . Includes a number of methods: • 5Ss • Standard operations • Skill control, including the assessment of individuals capabilities, the identification of job requirements, the development of a comparison matrix and the identification of training needs; • Kaizen is a cost cutting approach that continuously makes small improvements to processes (Wikipedia, 2005); • Visual management, the provision of notice boards for control information, stock, materials movement, health and safety and work methods. ‘Genba Kanri’ – Workplace Management
  25. 25. CH/25 © Dr. Christian Hicks 5Ss Waller, D.L.,,1999,”Operations Management: A Supply Chain Approach”, (Thompson, London)
  26. 26. Functional layout Cellular layout Askin G.G & Standridge C.R. (1993) Modelling and Analysis of Manufacturing Systems, John Wiley ISBN 0-471-57369-8
  27. 27. CH/27 © Dr. Christian Hicks © Siemens Power Generation Systems Functional layout
  28. 28. CH/28 © Dr. Christian Hicks Manufacturing cells © Siemens Power Generation Systems
  29. 29. CH/29 © Dr. Christian Hicks Multifunction double gantry mill © Siemens Power Generation Systems A single machine acting as a cell
  30. 30. CH/30 © Dr. Christian Hicks Group Technology / Cellular Manufacturing • Improved material flow • Reduced queuing time • Reduced inventory • Improved use of space • Improved team work • Reduced waste • Increased flexibility
  31. 31. CH/31 © Dr. Christian Hicks Set-up Time Reduction • Single minute exchange of dies (SMED) - all changeovers < 10 mins. 1. Separate internal set-up from external set-up. Internal set-up must have machine turned off. 2. Convert as many tasks as possible from being internal to external 3. Eliminate adjustment processes within set-up 4. Abolish set-up where feasible Shingo, S. (1985),”A Revolution in Manufacturing: the SMED System”, The Productivity Press, USA.
  32. 32. CH/32 © Dr. Christian Hicks Set-up Analysis • Video whole set-up operation. Use camera’s time and date functions • Ask operators to describe tasks. As group to share opinions about the operation.
  33. 33. CH/33 © Dr. Christian Hicks Three Stages of SMED 1. Separating internal and external set-up doing obvious things like preparation and transport while the machine is running can save 30-50%. 2. Converting internal set-up to external set-up 3. Streamlining all aspects of the set-up operation
  34. 34. CH/34 © Dr. Christian Hicks Single Minute Exchange of Dies (SMED) Waller, D.L., 2003,”Operations Management: a Supply Chain Perspective 2nd Edition”, Thompson, London Increases flexibility Makes it easier to reduce batch size Reduces waste
  35. 35. CH/35 © Dr. Christian Hicks Overall Equipment Effectiveness • Open time – total time an operator available to work on a machine e.g. 8 hours per day • Operator pause – coffee breaks, chatting, toilet breaks etc. • Machine breakdowns • Unplanned interruptions e.g. having to make modifications • Machine set-up • Low performance – throughput less than design. • Scrap products
  36. 36. CH/36 © Dr. Christian Hicks Waller, D.L.,,1999,”Operations Management: A Supply Chain Approach”, (Thompson, London) Overall Equipment Effectiveness
  37. 37. CH/37 © Dr. Christian Hicks Using several small machines rather than one large one allows simultaneous processing, is more robust and is more flexible Slack, N. Chambers, S. and Johnson, R, 2004,”Operations Management, 4th Edition”, Prentice Hall Small Machine Concept
  38. 38. CH/38 © Dr. Christian Hicks Lean Material Control • Pull scheduling • Line balancing • Schedule balance and smoothing (Heijunka) • Under capacity scheduling • Visible control • Point of use delivery • Small lot & batch sizes
  39. 39. CH/39 © Dr. Christian Hicks Waller, D.L., 2003,”Operations Management: a Supply Chain Perspective 2nd Edition”, Thompson, London
  40. 40. CH/40 © Dr. Christian Hicks Workers operate at their own pace trying to maximise output Push system Waller, D.L., 2003,”Operations Management: a Supply Chain Perspective 2nd Edition”, Thompson, London
  41. 41. CH/41 © Dr. Christian Hicks Lead time Push system Waller, D.L., 2003,”Operations Management: a Supply Chain Perspective 2nd Edition”, Thompson, London
  42. 42. CH/42 © Dr. Christian Hicks Pull system synchronised with demand. Lot size = 1 Waller, D.L., 2003,”Operations Management: a Supply Chain Perspective 2nd Edition”, Thompson, London
  43. 43. CH/43 © Dr. Christian Hicks Pull system Lead time Waller, D.L., 2003,”Operations Management: a Supply Chain Perspective 2nd Edition”, Thompson, London
  44. 44. CH/44 © Dr. Christian Hicks Flexible workers in Lean combine WP2 & 3 Production after 1 hour: WP1: 180 WP2&3 combined: 180 Increase = 36 per hour Waller, D.L., 2003,”Operations Management: a Supply Chain Perspective 2nd Edition”, Thompson, London
  45. 45. CH/45 © Dr. Christian Hicks “Pull” Systems • Work centres only authorised to produce when it has been signalled that there is a need from a user / downstream department • No resources kept busy just to increase utlilisation Requires: • Small lot-sizes • Low inventory • Fast throughput • Guaranteed quality
  46. 46. CH/46 © Dr. Christian Hicks Pull Systems Implementations vary • Visual / audio signal • “Chalk” square • One / two card Kanban
  47. 47. CH/47 © Dr. Christian Hicks Lean Purchasing • Lean purchasing requires predictable (usually synchronised) demand • Single sourcing • Supplier quality certification • Point of use delivery • Family of parts sourcing • Frequent deliveries of small quantities • Propagate Lean down supply chain, suppliers need flexibility • Suppliers part of the process vs. adversarial relationships
  48. 48. CH/48 © Dr. Christian Hicks Lean Purchasing • Controls and reduces inventory • Reduces space • Reduces material handling • Reduces waste • Reduces obsolescence
  49. 49. CH/49 © Dr. Christian Hicks Notice placed prominently at the door at Faurecia
  50. 50. CH/50 © Dr. Christian Hicks More detail
  51. 51. CH/51 © Dr. Christian Hicks Organisation for Change • Multi-skilled team working • Quality Circles, Total Quality Management • Philosophy of joint commitment • Visible performance measurement – Statistical process control (SPC) – Team targets / performance measurement • Enforced problem solving • Continuous improvement
  52. 52. CH/52 © Dr. Christian Hicks Total Quality Management (TQM) • Focus on the customer and their requirements • Right first time • Competitive benchmarking • Minimisation of cost of quality – Prevention costs – Appraisal costs – Internal / external failure costs – Cost of exceeding customer requirements • Founded on the principle that people want to own problems
  53. 53. CH/53 © Dr. Christian Hicks The Deming Cycle Hill, T. 2005, “Operations Management, 2nd Edition”, Palgrave Macmillan
  54. 54. CH/54 © Dr. Christian Hicks Cause/effect (fishbone) diagram Hill, T. 2005, “Operations Management, 2nd Edition”, Palgrave Macmillan
  55. 55. CH/55 © Dr. Christian Hicks Lean Flexibility • Set-up time reduction • Small transfer batch sizes • Small lot sizes • Under capacity scheduling • Often labour is the variable resource • Smallest machine concept
  56. 56. CH/56 © Dr. Christian Hicks Reducing Uncertainty • Total Preventative Maintenance (TPM) / Total Productive Maintenance • 100% quality • Quality is part of the process - it can’t be inspected in • Stable and uniform schedules • Supplier quality certification
  57. 57. CH/57 © Dr. Christian Hicks Total Preventative Maintenance (TPM) • Strategy to prevent equipment and facility downtime • Planned schedule of maintenance checks • Routine maintenance performed by the operator • Maintenance departments train workers, perform maintenance audits and undertake more complicated work.
  58. 58. CH/58 © Dr. Christian Hicks The problem with inventory Reduce the level of inventory (water) to reveal the operations’ problems WIP Defective materials Rework Scrap Downtime productivity problems WIP Defective materials Rework Scrap Downtime productivity problems Slack, N. Chambers, S. and Johnson, R, 2004,”Operations Management, 4th Edition”, Prentice Hall
  59. 59. CH/59 © Dr. Christian Hicks Operational prerequisites • Level schedules • Frozen schedules • Fixed routings • Frequent set ups • Small and fixed order quantities • High quality conformance • Low process breakdowns • Labour utilisation not the key factor • Employee involvement
  60. 60. CH/60 © Dr. Christian Hicks Lean in the North East of England • Regional Development Agency the North East Productivity Alliance to disseminate Lean expertise. • The initiative involves about 150 companies in the region. • A pilot of 16 companies resulted in total savings of £4.36m. Several companies would have otherwise have gone out of business. • There were dramatic improvements in efficiency, delivery performance and productivity.